The S&P 500 has gained more than 13% year-to-date, hitting fresh records last week, with nearly every sector now in positive territory. According to BTIG, the August 18 to October 11 period represents the worst part of the calendar during midterm election years, with the index dropping at least 7% during this window in every midterm since 1990. Ongoing Middle East hostilities and the prospect of higher interest rates could weigh on equities, while bond market signals remain concerning with the 10-year yield above 4.7%. BTIG recommends paring down risk and favoring defensive sectors like healthcare, which has risen more than 15% over the past three months.
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